Oil prices advance as investors reassess US inventories data

An aerial view shows oil tanks of Transneft oil pipeline operator at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia June 13, 2022. Picture taken with a drone. REUTERS/Tatiana Meel

TOKYO — Global oil prices edged up on Thursday, recovering from two consecutive sessions of decline, as investors reassessed the latest U.S. crude oil and gasoline inventories data and returned to buying mode.

Brent crude futures for May were up 29 cents, or 0.34 percent, at $86.38 a barrel while the more actively traded June contract rose 28 cents, or 0.33 percent, to $85.69 at 0041 GMT. The May contract expires on Thursday.

U.S. West Texas Intermediate (WTI) crude futures for May delivery were up 41 cents, or 0.50 percent, to $81.76 a barrel.

In the prior session, oil prices were under pressure after U.S. crude oil and gasoline inventories rose unexpectedly last week driven by a rise in crude imports and sluggish gasoline demand, according the Energy Information Administration data.

READ: Oil prices fall for a second day as US crude inventories rise

However, the crude stock increase was smaller than the build projected by the American Petroleum Institute.

“We… expect US inventories to rise less than normal in reflection of a global oil market in a slight deficit. This will likely hand support to the Brent crude oil price going forward,” Bjarne Schieldrop, chief commodities analyst at SEB Research, said in a note.

READ: Fed’s Waller still sees ‘no rush’ to cut rates

Recent disappointing inflation data affirms the case for the U.S. Federal Reserve to hold off on cutting its short-term interest rate target, a Fed governor said on Wednesday, but he did not rule out trimming rates later in the year.

“The market is converging on a June start to cuts for both the Fed and the European Central Bank,” JPMorgan analysts said in a note. Lower interest rates support oil demand.